Nonresident Contractor Bond in Delaware

What this bond requires in Delaware

Delaware does not have a statewide general contractor license bond, but Title 30 requires every nonresident contractor or subcontractor to post a surety bond (or cash bond or irrevocable letter of credit) equal to 6% of the contract price on any contract of $20,000 or more, or where aggregated contracts in a calendar year reach $20,000. The bond secures payment of Delaware state taxes and must be filed with the Division of Revenue before construction begins. The Secretary of Finance may waive the bond if tax revenue is determined not to be at risk.

Who requires it

The nonresident contractor bond is required by the Delaware Division of Revenue, Department of Finance under 30 Del. C. ch. 25 (Occupational Licenses), §§ 2501-2502; Title 30, Ch. 3, Subch. V.

How to file in Delaware

Resident and nonresident contractors first obtain a Delaware business license from the Division of Revenue. Nonresident contractors then file the Nonresident Contractor Bond (form provided by Division of Revenue) or cash bond/irrevocable letter of credit before starting any qualifying job. Bonds are released after the contract is complete and Delaware verifies all state tax liabilities have been paid.

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FAQ

Common questions

Is a nonresident contractor bond required in Delaware?

Bond equal to 6% of the contract or subcontract price on contracts of $20,000 or more (single or aggregated within a calendar year).

How much is the bond in Delaware?

Delaware does not publish a single flat amount. See the state-specific notes for how it is determined.

Who requires the bond?

The bond is required by the Delaware Division of Revenue, Department of Finance.

How is the bond filed?

Resident and nonresident contractors first obtain a Delaware business license from the Division of Revenue. Nonresident contractors then file the Nonresident Contractor Bond (form provided by Division of Revenue) or cash bond/irrevocable letter of credit before starting any qualifying job. Bonds are released after the contract is complete and Delaware verifies all state tax liabilities have been paid.

What does the bond cover?

Surety bonds protect the obligee, not the principal. If you fail to meet the obligation the bond guarantees, the surety pays the claim and recovers from you.

Is a surety bond the same as insurance?

No. Insurance protects you. A surety bond protects whoever required the bond. You repay the surety for any claim they pay.